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Consumer Prices

Consumer Prices

+0.3% to monthly headline and core CPI is anticipated…

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, April 10. The Bottom Line segment of today’s podcast starts at (3:22) for listeners who want to skip ahead.

State of Play

Stocks treaded water again yesterday in another uneventful session. As we look at our board of indicators at 0620, all is deadly quiet ahead of the CPI print at 0830:

  • Stock index futures are flat as a board with no major US index moving at all from the break-even point;

  • Bonds are unchanged as well. The 2-year yields 4.74% whilst the 10-year is 4.36%;

  • Commodities aren’t doing anything either. WTI crude oil is unchanged at $85.50/barrel. Copper is up 0.7%;

  • Cryptos have turned lower with Bitcoin down 2% to drop below $69,000.

Today’s Known Events

The Consumer Price Index from the Bureau of Labor Statistics is out at 0830 this morning. Economists who were surveyed expect an increase of 0.3% month-over-month to the headline CPI figure, a small decrease from the 0.4% recorded last month, which would increase the annualized number to 3.4% from 3.2%

Core CPI, which excludes food and energy, is expected to print at 0.3% MoM versus 0.4% last month, which would drop the annualized figure nominally to 3.7% from 3.8%.

This afternoon at 1400 we’ll get minutes from last month’s FOMC meeting. That’s always good for some commentary even though it is from a moment in time that has already passed and is for all intents and purposes no longer relevant. The CPI is much more important where future Fed interest rate policy is concerned.

Delta Air Lines (DAL 0.00%↑) also reports earnings today before the open.

The Bottom Line©️

The number again: 0.3% MoM for headline and core CPI figures. That’s still a bit elevated. As you can see the recent figures have been pretty stubborn for core CPI especially:

Jerome Powell for his part shrugged off January’s figure as “seasonal.” That’s nice, but sooner or later we’re going to need lower core CPI figures if the Fed is going to be in a position where they can cut rates. Or so the thinking goes, at least. Many people seem to think it’s time to cut rates regardless. We’ll see if rate cut hopes continue to get pushed back. What happens today could be telling in that regard. Odds are roughly even right now on a rate cut at the June 12 FOMC meeting, according to Fed fund futures. Watch that number after today’s print.

Finally a friendly reminder that inflation figures are one datapoint economists usually get pretty right. Chances are the numbers will be very close to, if not exactly at, what was anticipated. Which again is 0.3% MoM for core and headline CPI. Which again is still high, so figure that would cause a sell off?

Maybe not. Investors have proven themselves pretty willing to bid up stocks and other risk assets this year. But then speaking of risk assets, cryptos have taken a turn lower this week, so there is that…


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The daily podcast discusses the major market activity and economic data release schedule for the day ahead, with a contrarian bent. Also includes regular podcast episodes a day (or more) early and without ads or announcements.